Northern Territory Renewable Energy and Electricity Market Reform

IMPLEMENTATION PLAN 2018-20

RENEWABLE ENERGY AND ELECTRICITY MARKET REFORM IMPLEMENTATION PLAN 2018-2020

WORK STREAM A: SYSTEM DESIGN

INITIATIVE ACTIONSTIMELINE

2018 2019 2020

1. Future proof the electricity supply networks by establishing the required technical design characteristics to achieve the target at least cost to government whilst maintaining security and reliability of supply to consumers.

a) Develop validated dynamic network models for the Darwin-Katherine, Alice Springs, and Tenant Creek Electricity Networks.

b) Complete detailed investigations, including technical and market modelling, to provide advice on the optimum pathway, asset mix and system upgrades required for the integration of renewable energy to achieve the target.

2. Support the research and development of technologies and systems, suitable for the Northern Territory, that facilitate optimal integration of renewable energy into the networks.

a) Investigate potential opportunities to access ARENA funding for the installation of energy storage solutions that support renewable energy integration in remote systems.

b) Investigate cooling systems as an alternative energy storage technology.

c) Charles Darwin University to undertake research and identify opportunities for renewable energy opportunities suitable for the Territory.

d) Centre for Appropriate Technology to develop a publicly available, interactive web-based renewable energy resource database.

e) Desert Knowledge Australia’s Centre of Excellence in Renewable Energy – the ‘Intyalheme Centre for Future Energy’ established.

RENEWABLE ENERGY AND ELECTRICITY MARKET REFORM IMPLEMENTATION PLAN 2018-2020

WORK STREAM B: MARKET & GOVERNANCE FRAMEWORK INITIATIVE

INITIATIVE ACTIONSTIMELINE

2018 2019 2020

3. Align government policies to ensure consistency with the objective of achieving the renewable energy target

a) Recognise the role of energy as a key driver of economic development, founded on competitively priced and environmentally responsible electricity generation.

b) Ensure the Energy Policy aligns with the renewable energy target.

c) Ensure the Climate Change Framework aligns with the renewable energy target

d) Establish and maintain a government working group to ensure the electricity reform process aligns with the renewable energy target

4. Establish a regulatory framework which supports economic investment in renewable energy and certainty for industry whilst maintaining a secure and reliable supply to consumers.

a) Establish a Reliability Standard which balances the benefit of higher reliability for customers with the costs.

b) Establish a Reliability Manager with responsibility for determining the system-wide capacity requirement for renewable and non-renewable plant to meet the Reliability Standard.

c) Establish generator performance standards to accommodate increased levels of renewable energy generation on the network.

d) Define in detail, the requirements for ancillary services in a way that allows renewable energy generators to purchase long-term contracts for these services.

e) Complete the review of the proposed Frequency Control Ancillary Service (FCAS) and Inertia Ancillary Service (IAS) contained in the Secure System Guidelines to ensure they are appropriate for network stability and reliability targets.

f) Amend the Secure System guidelines and System Control Technical Code or other instruments to identify and facilitate the regulatory and commercial arrangements to enable procurement of appropriate ancillary services

g) Remove duplication and overlaps that currently exist in the Technical and Electricity Networks (Third Party Access) Codes and complete the review of the National Electricity Rules (NER), including the need for derogations and transitional arrangements to Chapters 5 to 10, to ensure they are appropriate for the Northern Territory and its renewable energy objectives. (The NER arrangements whereby System Control will be consulted during the negotiation of a Network Access Agreement in relation to system security and reliability will be adopted.)

RENEWABLE ENERGY AND ELECTRICITY MARKET REFORM IMPLEMENTATION PLAN 2018-2020

WORK STREAM B: MARKET & GOVERNANCE FRAMEWORK INITIATIVE

INITIATIVE ACTIONSTIMELINE

2018 2019 2020

4. Establish a regulatory framework which supports economic investment in renewable energy and certainty for industry whilst maintaining a secure and reliable supply to consumers.

h) Conduct ongoing reviews of regulatory frameworks related to electrical energy systems to ensure they can respond to technology change.

i) Upgrade the Market Settlement System to accommodate increased activities associated with new market conditions.

j) Review of the Ring-fencing Guidelines to ensure greater separation between System Control and PWC’s other business units.

5. Establish appropriate electricity pricing structures which are reflective of the actual costs of delivering services and encourage the optimum uptake of renewable energy and ancillary services.

a) Review the small-scale solar feed in tariff (FiT) to identify a long term transitional pathway to facilitate least cost to government, improve system security and reliability during peak periods, and provide certainty for consumers.

b) Review regulated tariffs to identify a long term transitional pathway to better reflect the cost of generation and to align with the demand profile for the Northern Territory.

c) Complete the unbundling of the costs of ancillary services so that these are adequately compensated for and can inform decisions of proponents considering investment in large-scale renewable energy projects.

d) Identify appropriate mechanisms to deliver ancillary and other system security services including the likely costs of such services.

RENEWABLE ENERGY AND ELECTRICITY MARKET REFORM IMPLEMENTATION PLAN 2018-2020

WORK STREAM C: INDUSTRY & COMMUNITY PARTICIPATION

INITIATIVE ACTIONSTIMELINE

2018 2019 2020

6. Develop an Industry Development Strategy to grow local RE capacity and encourage appropriate renewable energy investment in the NT

a) Facilitate and support a renewable energy industry development working group, led by local business, to identify training needs, share knowledge, and identify long term industry development opportunities.

b) Work with industry to identify the most cost-effective way for developers of large scale renewable energy projects to be responsible for assuring the supply of electricity as well as for the provision of ancillary services and system support to facilitate security and reliability of the system.

7. Implement a Community Renewable Energy Participation Program to encourage appropriate investment and support of the Government’s renewable energy goal

a) Undertake a review of national and international programs which support renewable energy investment for rental and public housing such as peer to peer trading to inform on possible program options which may be suitable in the Territory context.

b) Implementation of the Department of Education’s three year $5M solar in schools project.

c) Complete a cost benefit review of installing renewable energy onto other government assets versus the installation of centralised renewable energy supplies.

d) Investigate the potential costs and benefits of alternative options for the supply and maintenance of remote power supplies.

RENEWABLE ENERGY AND ELECTRICITY MARKET REFORM IMPLEMENTATION PLAN 2018-2020

WORK STREAM D: DEMAND & CONSUMPTION

INITIATIVE ACTIONSTIMELINE

2018 2019 2020

8. Facilitate the use of demand side management to reduce the level of investment required to support increased levels of renewable energy into the electricity system.

a) Undertake a review of potential demand side management opportunities, including small-scale, not currently utilised and the potential costs associated with these.

9. Implement an energy efficiency strategy to optimise the use of supplied electrical energy and help consumers to control their electrical energy costs.

a) Investigate options for the replacement of accumulation meters, including the costs and benefits to the government and consumers.

b) Environment Centre NT’s COOLmob program established to deliver home energy efficiency education.

c) $4M Smart Energy Grants program which provides grants to householders for energy efficiency measures and solar installations.

d) Smarter Business Solutions Program which provides grants for business to install energy efficiency measures and behind the meter solar and storage technologies.